I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

PART G: PREPARING SIMPLE CONSOLIDATED FINANCIAL STATEMENTS 

 

430

 

3.1.2 Goodwill attributable to NCI 

Total goodwill is recognised in the statement of financial position, as the group controls 100% of it. 

However, we can calculate goodwill attributable to the NCI as follows. 

 $'000 

Fair value of NCI 

1,000 

NCI in net assets at acquisition (10%  8,000) 

 (800) 

Goodwill  

 

200 

3.2 Example: NCIs 

P Co purchased 75% of the share capital of S Co on 1 January 20X1 for $60,000 when the retained 

earnings of S Co were $5,000. The fair value of the NCI in S Co at that date was $15,000. The 

statements of financial position of P Co and S Co as at 31 December 20X1 are given below.  

P CO   

STATEMENT OF FINANCIAL POSITION 

Assets 

$      

$      

Non-current assets 

   

Tangible assets 

50,000 

   30,000 $1 ordinary shares in S Co at cost 

 

60,000 

 

 

 

 

 110,000 

Current assets 

 

  45,000 

Total assets 

 

 

155,000 

Equity and liabilities 

Equity  

 

80,000 $1 ordinary shares 

 

80,000 

Retained earnings 

 

 

  55,000 

 

 135,000 

Current liabilities 

 

  20,000 

Total equity and liabilities 

 

 

155,000 

S CO  

STATEMENT OF FINANCIAL POSITION 

 

 

      

$      

Assets 

 

Tangible non-current assets 

 

35,000 

Current assets 

 

 

40,000 

Total assets  

 

 

75,000 

Equity and liabilities 

Equity  

 

40,000 $1 ordinary shares 

 

40,000 

Retained earnings 

 

 

15,000 

  

 

55,000 

Current liabilities 

 

 

20,000 

Total equity and liabilities  

 

 

75,000 

Required 

Prepare the consolidated statement of financial position at 31 December 20X1. 

Solution 

All of S Co's net assets are consolidated despite the fact that the company is only 75% owned. NCI is 

included in the statement of financial position at its fair value plus its share of post-acquisition retained 

earnings.  

BPP Tutor Toolkit Copy

---

CHAPTER 24  

//

  THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION